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2014 (9) TMI 1044 - Commission - Service TaxLeviability of Service tax and interest - Construction of residential complexes for the period April 2009 to December 2012 - Held that:- the issue is clarified by the Board vide Circular 151/2/2012-S.T., dated 10-2-2012, which makes it clear that even in the cases where builder/developer receives consideration for the construction service provided by him from land owner in the form of land/development rights, the service would not be taxable for the period prior to 1-7-2010. Therefore, here even if there is any agreement for sale of UDS of land prior to agreement for sale of flat, the activity for the period prior to 1-7-2010 would not be taxable in terms of Circular dated 10-2-2012. The aforesaid Circulars, clarifications in Budget Instructions. Notifications, Judicial pronouncements overwhelmingly hold that the construction of residential complexes undertaken prior to 1-7-2010 is not liable for Service Tax. Therefore, the liability of the applicant requires to be decided only for the period commencing from 1-7-2010 onwards and not earlier to that results in Service Tax demanded prior to 1-7-2010 under ‘Construction of Residential Complex Service’ is not payable. As the applicant has made full and true disclosure, accordingly after allowing the benefit in terms of Board’s clarifications in respect of services rendered prior to 1-7-2010 of ‘Construction of Residential Complex Services’ and considering value after 1-7-2010 as cum-tax value for computation of Service Tax as communicated by Revenue, Service Tax liability works out to ₹ 88,45,406/-. As such the Bench settles the Service Tax liability at ₹ 88,45,406/-. The applicant is eligible for refund of ₹ 1,40,912/- which should be dealt with in accordance with law. The Jurisdictional Commissioner would work out the interest liability and communicate to the applicant. Imposition of penalty - Non-payment of Service Tax on the various services rendered during the period April 2009 to December 2012 - Held that:- out of the demand, the major portion of the demand pertains to ‘Construction of residential complex service’ in respect of which the applicant admitted and paid Service Tax on the services rendered after 1-7-2010. The applicant had collected Service and had not paid the same on the services rendered by him. For the period prior to 1-7-2010, due to lack of clarity on the taxability of ‘Construction of Residential Complex service’, the applicant did not pay Service Tax. Also the applicant had admitted some amount of Service Tax liability which was not part of the SCN demand. For the Act of non-payment of Service Tax, the applicant is liable for penalty. However considering the co-operation, full and true disclosure the partial immunity from penalty to the applicant is granted. Prosecution - Section 32K of Central Excise Act, 1944 - Held that:- the applicant is granted immunity from prosecution under Section 32K of Central Excise Act, 1944, as made applicable to Service Tax vide Section 83 of the Finance Act, 1994. - Matter disposed of
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